CHANGZHOU, China, Aug. 18,
2022 /PRNewswire/ -- EZGO Technologies Ltd.
(Nasdaq: EZGO) ("EZGO" or "we", "our", or "the Company"), a
leading short-distance transportation solutions provider in
China, today announced its
unaudited financial results for the six months ended March 31, 2022.
Financial Highlights (all results compared to the prior
year period unless otherwise noted)
- Revenues were $6.0
million, a decrease of 34.3%
- Units sold reached 23,097, a decrease of
32.2%
- Gross margin was 4.7%, compared with 8.3%
- Net loss was $2.7 million,
compared with net loss of $0.3
million
- The Company has cash and cash equivalents of
approximately $2.1 million at
March 31, 2022, compared to
approximately $4.8 million at
September 30, 2021
Management Commentary
Mr. Jianhui Ye, Chief Executive
Officer of EZGO, stated, "During the six months ended March 31, 2022, our business was adversely
impacted greater than during any other period since the
commencement of the COVID-19 pandemic in early 2020. We were
required to implement random shutdowns of our Tianjin and Changzhou plants in order to control the
spread of COVID-19. During this period, our production, supply and
channel promotion of electric bicycles were materially adversely
effected. Since the fourth quarter of 2021, we have implemented a
new channel sales model in some provinces, changing from the
traditional model of 'Factory + Dealer + Store' to 'Factory + City
partner + Store'. The market resource input of the original sales
model was gradually decreased, which also resulted in the decline
of sales volume during the six months ended March 31, 2022."
Mr. Ye concluded, "The implementation of our new sales
model, since the fourth quarter of 2021, by more urban partners and
stores, along with the launch of our new products and the easing of
the domestic COVID-19 pandemic control policy, has resulted in a
gradual recovery in sales of our electric bicycles, as well as
sales of our supporting lithium batteries beginning in June 2022."
Financial Review for the Six Months Ended March 31, 2022
Net Revenues
Net revenues from continuing operations for the six months ended
March 31, 2022 were approximately
$6.0 million, a 34.3% decrease from
approximately $9.2 million for the
six months ended March 31, 2021. The
decrease in revenues were mainly driven by the decrease of sales of
e-bicycles, and partially offset by the increase of sales of
battery and battery packs.
The following table identifies revenue from continuing
operations and discontinued operation, as well as reportable
segments for the six months ended March 31,
2022 and 2021:
|
|
|
|
For the
six months ended March 31,
|
|
|
Change
|
|
|
Segment
|
|
2022
|
|
|
%
|
|
|
2021
|
|
|
%
|
|
|
Amount
|
|
|
%
|
Sales of
e-bicycles
|
|
E-bicycle sales
segment
|
|
$
|
4,055,330
|
|
|
|
67.2
|
|
|
$
|
7,643,039
|
|
|
|
79.6
|
|
|
$
|
(3,587,709)
|
|
|
|
(46.9)
|
Sales of batteries and
battery packs
|
|
Battery cells and
packs segment
|
|
|
1,581,023
|
|
|
|
26.3
|
|
|
|
1,027,888
|
|
|
|
10.7
|
|
|
|
553,135
|
|
|
|
53.8
|
Others
|
|
|
|
|
393,825
|
|
|
|
6.5
|
|
|
|
506,936
|
|
|
|
5.3
|
|
|
|
(113,111)
|
|
|
|
(22.3)
|
Subtotal
|
|
Net revenue from
continuing operation
|
|
|
6,030,178
|
|
|
|
100
|
|
|
|
9,177,863
|
|
|
|
95.6
|
|
|
|
(3,147,685)
|
|
|
|
(34.3)
|
Rental of lithium
batteries and e-bicycles
|
|
Rental
segment
|
|
|
261
|
|
|
|
-
|
|
|
|
426,893
|
|
|
|
4.4
|
|
|
|
(426,632)
|
|
|
|
(99.9)
|
Subtotal
|
|
Net revenue from
discontinued operation
|
|
|
261
|
|
|
|
-
|
|
|
|
426,893
|
|
|
|
4.4
|
|
|
|
(426,632)
|
|
|
|
(99.9)
|
Total
|
|
Net
revenues
|
|
$
|
6,030,439
|
|
|
|
100
|
|
|
$
|
9,604,756
|
|
|
|
100
|
|
|
$
|
(3,574,317)
|
|
|
|
(37.2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The e-bicycles sales segment engaged in online and offline sales
of e-bicycles. The revenue of sales of e-bicycles decreased to
approximately $3.6 million, or
approximately 46.9%, for the six months ended March 31, 2022 as compared to the same period in
2021, mainly due to the repeated outbreaks of COVID-19 in the first
quarter of 2022 and adjustments made to selling policies.
The revenue from battery cells and packs segment for the six
months ended March 31, 2022 and 2021
were approximately $1.6 million and
$1.0 million, respectively, a 53.8%
increase derived from new customers and continuing relationships
with long-term customers, as a mitigated measure to reduce the
impact of COVID-19 on sales of e-bicycles.
Cost of Revenues
Our cost of revenues significantly decreased by approximately
$2.7 million, or approximately 31.7%,
to approximately $5.7 million for the
six months ended March 31, 2022 from
approximately $8.4 million for the
six months ended March 31, 2021,
which was primarily driven by the decreased sales of e-bicycles due
to the impact of COVID-19. The decrease was in line with the
decrease in our net revenues.
Gross Profit
Gross profit for the six months ended March 31, 2022 and 2021 was approximately
$282,000 and $757,000, representing 4.7% and 8.3% of net
revenues, respectively. The decrease of gross profit during the six
months ended in March 31, 2022, is
primarily due to the decreased sales of e-bicycles accounting for a
large proportion of our total revenue, thus, the gross profit rate
converged with that of sales of e-bicycles.
Selling and Marketing Expenses
Our selling and marketing expenses primarily consist of salaries
and benefits expense, advertising expense, and freight expense. Our
selling and marketing expenses increased by approximately
$223,000 or approximately 64.8%, to
approximately $567,000 for the six
months ended March 31, 2022 from
approximately $344,000 for the six
months ended March 31, 2021. Such
increase consisted of the increase of salaries and benefits expense
and advertising expense, which resulted from the recruitment of new
salespersons with the Company's business expansion on sales of
e-bicycles, and the exhibition promotion of sales of
e-bicycles.
General and Administrative Expenses
Our general and administrative expenses increased by
approximately $1.3 million or
approximately 154.1%, to approximately $2.1
million for the six months ended March 31, 2022 from approximately $833,000 for the six months ended March 31, 2021. The significant increase was
mainly due to higher R&D expenses invested for new models
during the six months ended March 31,
2022 and the amortization expenses of the land use right
acquired since July, 2021.
Income Tax Expense
Income tax expense amounted to approximately $519,000 for the six months ended March 31, 2022 and $17,000 for the six months ended March 31, 2021, respectively. The significant
increase of income tax expense is primarily due to the Company
determines that the cumulative deductible loss carryforwards of PRC
subsidiaries is likely not to be fully utilized against future
taxable income and thus it is accrued as valuation allowance of
deferred tax assets.
Net Loss
Net loss for the six months ended March
31, 2022 was approximately $2.7
million, compared to approximately $289,000 for the same period in 2021, mainly due
to the above reasons.
About EZGO Technologies Ltd.
Leveraging an Internet of Things (IoT) product and service
platform and three e-bicycle brands, "EZGO", "Cenbird" and
"Dilang", EZGO has established a business model centered on the
manufacturing and sale of two- and three-wheeled electric vehicles,
lithium batteries, complemented by the e-bicycle charging pile
business. For additional information, please visit EZGO's website
at www.ezgotech.com.cn. Investors can visit the "Investor
Relations" section of EZGO's website at
http://www.ezgotech.com.cn/Investor/.
Exchange Rate
This announcement contains translations of certain Chinese
Renminbi ("RMB") amounts into U.S. dollars ("US$") at specified
rates solely for the convenience of the readers. Unless otherwise
stated, all translations from RMB to US$ were made at the rate of
RMB 6.3393 to US$ 1.00, the exchange rate in effect as of
March 31, 2022, as set forth in the
H.10 Statistical release of the Board of Governors of the Federal
Reserve System. The Company makes no representation that the RMB or
US$ amounts referred could be converted into US$ or RMB, as the
case may be, at any particular rate or at all.
Safe Harbor Statement
This press release contains forward-looking statements as
defined by the Private Securities Litigation Reform Act of 1995.
Forward-looking statements include statements concerning plans,
objectives, goals, strategies, future events or performance, and
underlying assumptions and other statements that are other than
statements of historical facts. When the Company uses words such as
"may," "will," "intend," "should," "believe," "expect,"
"anticipate," "project," "estimate," or similar expressions that do
not relate solely to historical matters, it is making
forward-looking statements. Forward-looking statements are not
guarantees of future performance and involve risks and
uncertainties that may cause the actual results to differ
materially from the Company's expectations discussed in the
forward-looking statements. These statements are subject to
uncertainties and risks including, but not limited to, the
following: the Company's goals and strategies; the Company's future
business development; product and service demand and acceptance;
changes in technology; economic conditions; the growth of the
short-distance transportation solutions market in China and the other international markets the
Company plans to serve; reputation and brand; the impact of
competition and pricing; government regulations; fluctuations in
general economic and business conditions in China and the international markets the
Company plans to serve and assumptions underlying or related to any
of the foregoing and other risks contained in reports filed by the
Company with the Securities and Exchange Commission ("SEC"),
including the Company's most recently filed Annual Report on Form
20-F and its subsequent filings. For these reasons, among others,
investors are cautioned not to place undue reliance upon any
forward-looking statements in this press release. Additional
factors are discussed in the Company's filings with the SEC, which
are available for review at www.sec.gov. The Company undertakes no
obligation to publicly revise these forward‐looking statements to
reflect events or circumstances that arise after the date
hereof.
For more information, please contact:
At the Company:
Shawn Wen
Email: ir@ez-go.com.cn
Phone: (+86) 13502829216
EZGO TECHNOLOGIES LTD. AND
SUBSIDIARIES
|
UNAUDITED CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(In U.S. dollars
except for number of shares)
|
|
|
|
|
|
|
|
As of September
30,
|
|
As of March
31,
|
|
|
2021
|
|
2022
|
|
|
|
|
|
|
(unaudited)
|
ASSETS
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
4,774,531
|
|
$
|
2,111,392
|
Restricted
cash
|
|
|
1,115,354
|
|
|
15,605
|
Short-term
investments
|
|
|
2,387,003
|
|
|
788,731
|
Accounts receivable,
net
|
|
|
6,847,608
|
|
|
6,051,856
|
Inventories,
net
|
|
|
924,342
|
|
|
3,295,346
|
Advances to suppliers,
net
|
|
|
7,404,538
|
|
|
10,321,109
|
Amount due from related
parties, current
|
|
|
3,524,635
|
|
|
7,380,639
|
Prepaid expenses and
other current assets
|
|
|
609,602
|
|
|
742,872
|
Current assets of
discontinued operation
|
|
|
91,997
|
|
|
1,154
|
Total current
assets
|
|
|
27,679,610
|
|
|
30,708,704
|
|
|
|
|
|
|
|
Non-current
assets:
|
|
|
|
|
|
|
Property, plants and
equipment, net
|
|
|
8,746,386
|
|
|
5,568,045
|
Land use
right
|
|
|
4,510,849
|
|
|
7,562,960
|
Amount due from related
parties, non-current
|
|
|
310,395
|
|
|
315,492
|
Long-term
investments
|
|
|
132,621
|
|
|
158,461
|
Deferred tax assets,
net
|
|
|
585,428
|
|
|
73,261
|
Non-current assets of
discontinued operation
|
|
|
46,381
|
|
|
27,461
|
Total non-current
assets
|
|
|
14,332,060
|
|
|
13,705,680
|
|
|
|
|
|
|
|
Total
assets
|
|
$
|
42,011,670
|
|
$
|
44,414,384
|
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
Short-term
borrowings
|
|
$
|
310,395
|
|
$
|
3,154,922
|
Accounts
payable
|
|
|
650,693
|
|
|
589,196
|
Accrued expenses and
other payables
|
|
|
7,142,630
|
|
|
7,839,187
|
Advances from
customers
|
|
|
94,899
|
|
|
1,060,177
|
Income tax
payable
|
|
|
395,483
|
|
|
396,719
|
Amount due to related
parties
|
|
|
71,849
|
|
|
274,766
|
Current liabilities of
discontinued operation
|
|
|
809,221
|
|
|
815,428
|
Total current
liabilities
|
|
$
|
9,475,170
|
|
$
|
14,130,395
|
|
|
|
|
|
|
|
Total
liabilities
|
|
$
|
9,475,170
|
|
$
|
14,130,395
|
|
|
|
|
|
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EQUITY
|
|
|
|
|
|
|
Ordinary shares (par
value of $0.001 per share;
100,000,000 shares authorized as of September 30, 2021
and March 31, 2022; 13,626,891 shares issued and
outstanding as of September 30, 2022 and March 31,
2022, respectively)
|
|
$
|
13,627
|
|
$
|
13,627
|
Subscription
receivable
|
|
|
(7,800)
|
|
|
(7,800)
|
Receivables from a
shareholder
|
|
|
(3,152,179)
|
|
|
(3,169,238)
|
Additional paid-in
capital
|
|
|
32,260,048
|
|
|
32,260,048
|
Statutory
reserve
|
|
|
233,413
|
|
|
237,849
|
Accumulated
deficit
|
|
|
(1,423,614)
|
|
|
(3,772,489)
|
Accumulated other
comprehensive income
|
|
|
594,507
|
|
|
1,010,936
|
Total EZGO
Technologies Ltd.'s shareholders' equity
|
|
$
|
28,518,002
|
|
$
|
26,572,933
|
Non-controlling
interests
|
|
|
4,018,498
|
|
|
3,711,056
|
Total
equity
|
|
|
32,536,500
|
|
|
30,283,989
|
|
|
|
|
|
|
|
Total liabilities
and equity
|
|
$
|
42,011,670
|
|
$
|
44,414,384
|
The accompanying notes are an integral part of
these unaudited condensed consolidated financial statements.
F-2
EZGO TECHNOLOGIES LTD. AND
SUBSIDIARIES
|
UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
(In U.S. dollars
except for number of shares)
|
|
|
|
|
|
For the six months
ended March 31,
|
|
|
2021
|
|
2022
|
|
|
|
|
|
|
|
Net revenues
|
|
$
|
9,177,863
|
|
$
|
6,030,178
|
Cost of
revenues
|
|
|
(8,420,429)
|
|
|
(5,747,962)
|
Gross
profit
|
|
|
757,434
|
|
|
282,216
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
Selling and marketing
expenses
|
|
|
(343,705)
|
|
|
(566,553)
|
General and
administrative expenses
|
|
|
(832,593)
|
|
|
(2,115,490)
|
Total operating
expenses
|
|
|
(1,176,298)
|
|
|
(2,682,043)
|
|
|
|
|
|
|
|
Loss from
operations
|
|
|
(418,864)
|
|
|
(2,399,827)
|
|
|
|
|
|
|
|
Other income
(expenses):
|
|
|
|
|
|
|
Interest expense,
net
|
|
|
(12,919)
|
|
|
(45,891)
|
Other income,
net
|
|
|
165,436
|
|
|
398,358
|
Total other income,
net
|
|
|
152,517
|
|
|
352,467
|
|
|
|
|
|
|
|
Loss from continuing
operations before income tax expense
|
|
|
(266,347)
|
|
|
(2,047,360)
|
Income tax
expense
|
|
|
(17,489)
|
|
|
(519,311)
|
Net loss from
continuing operations
|
|
|
(283,836)
|
|
|
(2,566,671)
|
Loss from discontinued
operation, net of tax
|
|
|
(5,158)
|
|
|
(105,797)
|
Net
loss
|
|
|
(288,994)
|
|
|
(2,672,468)
|
|
|
|
|
|
|
|
Net loss from
continuing operations
|
|
|
(283,836)
|
|
|
(2,566,671)
|
Less: Net income (loss)
attributable to non-controlling interests from
continuing operations
|
|
|
69,827
|
|
|
(328,029)
|
Net loss attributable
to EZGO Technologies Ltd.'s shareholders from
continuing operations
|
|
|
(353,663)
|
|
|
(2,238,642)
|
|
|
|
|
|
|
|
Loss from discontinued
operation, net of tax
|
|
|
(5,158)
|
|
|
(105,797)
|
Less: Net income (loss)
attributable to non-controlling interests from
discontinued operation
|
|
|
-
|
|
|
-
|
Net loss attributable
to EZGO Technologies Ltd.'s shareholders from
discontinued operation
|
|
|
(5,158)
|
|
|
(105,797)
|
Net loss
attributable to EZGO Technologies Ltd.'s
shareholders
|
|
$
|
(358,821)
|
|
$
|
(2,344,439)
|
|
|
|
|
|
|
|
Net loss from
continuing operations per ordinary share:
|
|
|
|
|
|
|
Basic and
diluted
|
|
$
|
(0.04)
|
|
$
|
(0.16)
|
Net loss from
discontinued operation per ordinary share:
|
|
|
|
|
|
|
Basic and
diluted
|
|
$
|
(0.00)
|
|
$
|
(0.01)
|
Net loss per ordinary
share:
|
|
|
|
|
|
|
Basic and
diluted
|
|
$
|
(0.04)
|
|
$
|
(0.17)
|
Weighted average shares
outstanding
|
|
|
|
|
|
|
Basic and
diluted
|
|
|
8,809,581
|
|
|
13,626,891
|
The accompanying notes are an integral part of
these unaudited condensed consolidated financial statements.
F-3
EZGO TECHNOLOGIES LTD.
|
UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
|
(In U.S.
dollars)
|
|
|
|
|
|
For the six months
ended March 31,
|
|
|
2021
|
|
2022
|
|
|
|
|
|
|
|
Loss from continuing
operations before non-controlling interests
|
|
$
|
(283,836)
|
|
$
|
(2,566,671)
|
Loss from discontinued
operation, net of tax
|
|
|
(5,158)
|
|
|
(105,797)
|
Net
loss
|
|
|
(288,994)
|
|
|
(2,672,468)
|
|
|
|
|
|
|
|
Other comprehensive
(loss) income
|
|
|
|
|
|
|
Foreign currency
translation adjustment
|
|
|
344,612
|
|
|
416,429
|
Comprehensive income
(loss)
|
|
|
55,618
|
|
|
(2,256,039)
|
Less: Comprehensive
income (loss) attributable to non-controlling
interests
|
|
|
208,931
|
|
|
(307,442)
|
Comprehensive (loss)
attributable to EZGO Technologies Ltd.'s
shareholders
|
|
$
|
(153,313)
|
|
$
|
(1,948,597)
|
The accompanying notes are an integral part of
these unaudited condensed consolidated financial
statements.
F-4
EZGO TECHNOLOGIES LTD.
|
UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
|
(In U.S. dollars
except for number of shares)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ordinary
shares
|
|
Subscription
receivables
|
|
Receivables
from a
shareholder
|
|
Additional
paid-in capital
|
|
Statutory
reserve
|
|
Accumulated
deficit
|
|
Accumulated
other
comprehensive
income (loss)
|
|
Total
shareholders'
equity
|
|
Non-
controlling
interests
|
|
Total
equity
|
|
Shares
|
|
Amount
|
Balance as of
September 30, 2020
|
7,800,000
|
|
$
|
7,800
|
|
$
|
(7,800)
|
|
$
|
(4,737,521)
|
|
$
|
12,078,058
|
|
$
|
212,842
|
|
$
|
1,575,630
|
|
$
|
(259,547)
|
|
$
|
8,869,462
|
|
$
|
4,275,683
|
|
$
|
13,145,145
|
Issued shares of common
stock
|
3,038,500
|
|
|
3,039
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
3,039
|
|
|
-
|
|
|
3,039
|
Shareholders'
contributions
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
10,039,581
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
10,039,581
|
|
|
-
|
|
|
10,039,581
|
Net income
(loss)
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(358,821)
|
|
|
-
|
|
|
(358,821)
|
|
|
69,827
|
|
|
(288,994)
|
Appropriation of
statutory reserve
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
14,461
|
|
|
(14,461)
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
Receivable from a
shareholder
|
-
|
|
|
-
|
|
|
-
|
|
|
443,997
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
443,997
|
|
|
-
|
|
|
443,997
|
Foreign currency
translation
adjustment
|
-
|
|
|
-
|
|
|
-
|
|
|
(127,532)
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
205,508
|
|
|
77,976
|
|
|
139,104
|
|
|
217,080
|
Balance as of March
31, 2021
|
10,838,500
|
|
$
|
10,839
|
|
$
|
(7,800)
|
|
$
|
(4,421,056)
|
|
$
|
22,117,639
|
|
$
|
227,303
|
|
$
|
1,202,348
|
|
$
|
(54,039)
|
|
$
|
19,075,234
|
|
$
|
4,484,614
|
|
$
|
23,559,848
|
|
Ordinary
shares
|
|
Subscription
receivables
|
|
Receivables
from a
shareholder
|
|
Additional
paid-in capital
|
|
Statutory
reserve
|
|
Accumulated
deficit
|
|
Accumulated
other
comprehensive
income (loss)
|
|
Total
shareholders'
equity
|
|
Non-
controlling
interests
|
|
Total
equity
|
|
Shares
|
|
Amount
|
Balance as of
September 30, 2021
|
13,626,891
|
|
$
|
13,627
|
|
$
|
(7,800)
|
|
$
|
(3,152,179)
|
|
$
|
32,260,048
|
|
$
|
233,413
|
|
$
|
(1,423,614)
|
|
$
|
594,507
|
|
$
|
28,518,002
|
|
$
|
4,018,498
|
|
$
|
32,536,500
|
Net loss
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(2,344,439)
|
|
|
-
|
|
|
(2,344,439)
|
|
|
(328,029)
|
|
|
(2,672,468)
|
Receivable from a
shareholder
|
-
|
|
|
-
|
|
|
-
|
|
|
34,540
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
34,540
|
|
|
-
|
|
|
34,540
|
Appropriation of
statutory reserve
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
4,436
|
|
|
(4,436)
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
Foreign currency
translation adjustment
|
-
|
|
|
-
|
|
|
-
|
|
|
(51,599)
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
416,429
|
|
|
364,830
|
|
|
20,587
|
|
|
385,417
|
Balance as of March
31, 2022
|
13,626,891
|
|
$
|
13,627
|
|
$
|
(7,800)
|
|
$
|
(3,169,238)
|
|
$
|
32,260,048
|
|
$
|
237,849
|
|
$
|
(3,772,489)
|
|
$
|
1,010,936
|
|
$
|
26,572,933
|
|
$
|
3,711,056
|
|
$
|
30,283,989
|
The accompanying notes are an integral part of
these unaudited condensed consolidated financial statements.
F-5
EZGO TECHNOLOGIES LTD.
|
UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(In U.S. dollars
except for number of shares)
|
|
|
|
|
|
For the six months
ended March 31,
|
|
|
2021
|
|
2022
|
CASH FLOWS FROM
OPERATING ACTIVITIES:
|
|
|
|
|
|
|
Net
(loss)
from continuing operations
|
|
$
|
(283,836)
|
|
$
|
(2,566,671)
|
Net income (loss) from
discontinued operation
|
|
|
(5,158)
|
|
|
(105,797)
|
|
|
|
|
|
|
|
Adjustments to
reconcile net income to net cash provided by (used in)
operating activities:
|
|
|
|
|
|
|
Allowance for doubtful
accounts
|
|
|
9,744
|
|
|
113,387
|
Write down of
inventories
|
|
|
-
|
|
|
226,298
|
Depreciation and
amortization
|
|
|
185,479
|
|
|
461,253
|
Deferred tax (benefit)
expense
|
|
|
(48,324)
|
|
|
519,315
|
Changes in assets and
liabilities
|
|
|
|
|
|
|
Accounts
receivable
|
|
|
3,817,776
|
|
|
875,632
|
Inventories
|
|
|
(1,890,865)
|
|
|
(2,570,990)
|
Advances to
suppliers
|
|
|
(5,567,345)
|
|
|
(2,781,751)
|
Prepaid expenses and
other current assets
|
|
|
(3,491,675)
|
|
|
(2,553,715)
|
Amount due from
related parties
|
|
|
1,035,382
|
|
|
(117,161)
|
Accounts
payable
|
|
|
(114,196)
|
|
|
(76,621)
|
Advances from
customers
|
|
|
1,534,265
|
|
|
527,517
|
Accrued expenses and
other payables
|
|
|
468,914
|
|
|
958,574
|
Income tax
payable
|
|
|
504,578
|
|
|
(13,107)
|
Net cash (used in)
operating activities, continuing operations
|
|
|
(3,840,103)
|
|
|
(6,998,040)
|
Net cash provided by
(used in) operating activities, discontinued
operation
|
|
|
812,175
|
|
|
(82,534)
|
Total cash (used in)
operating activities
|
|
$
|
(3,027,928)
|
|
$
|
(7,080,574)
|
|
|
|
|
|
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES:
|
|
|
|
|
|
|
Purchase of property,
plants and equipment
|
|
|
(424,936)
|
|
|
(274,175)
|
Maturity of short-term
investments
|
|
|
-
|
|
|
1,570,007
|
Purchase of long-term
investments
|
|
|
-
|
|
|
(23,550)
|
Proceed from disposal
of property, plants and equipment
|
|
|
82,416
|
|
|
158,918
|
Net cash provided by
(used in) investing activities, continuing
operations
|
|
|
(342,520)
|
|
|
1,431,200
|
Net cash provided by
investing activities, discontinued operation
|
|
|
433,020
|
|
|
353
|
Total cash provided
by investing activities
|
|
$
|
90,500
|
|
$
|
1,431,553
|
|
|
|
|
|
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES:
|
|
|
|
|
|
|
Proceeds from
short-term borrowings
|
|
|
-
|
|
|
2,826,012
|
Repayments of
short-term borrowings
|
|
|
(5,053)
|
|
|
-
|
Repayment of
interest-free loan to a related party
|
|
|
-
|
|
|
(549,502)
|
Interest-free loan to
related parties
|
|
|
-
|
|
|
(471,002)
|
Collection of loan
from a shareholder
|
|
|
443,997
|
|
|
34,540
|
Cash receipts from
equity issuance, net of issuance cost
|
|
|
9,532,098
|
|
|
-
|
Net cash provided by
financing activities, continuing operations
|
|
|
9,971,042
|
|
|
1,840,048
|
Total cash provided
by financing activities
|
|
$
|
9,971,042
|
|
$
|
1,840,048
|
|
|
|
|
|
|
|
Effect of exchange rate
changes
|
|
|
219,421
|
|
|
46,085
|
|
|
|
|
|
|
|
Net increase (decrease)
in cash, cash equivalents and restricted cash
|
|
|
7,253,035
|
|
|
(3,762,888)
|
Cash, cash equivalents
and restricted cash, at beginning of fiscal year
|
|
|
340,530
|
|
|
5,889,885
|
Cash, cash equivalents
and restricted cash, at end of fiscal year
|
|
|
7,593,565
|
|
|
2,126,997
|
|
|
|
|
|
|
|
Reconciliation of
cash, cash equivalents, and restricted cash to the Consolidated
Balance Sheets
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
|
7,074,834
|
|
|
2,111,392
|
Restricted
cash
|
|
|
518,731
|
|
|
15,605
|
Total cash, cash
equivalents, and restricted cash
|
|
$
|
7,593,565
|
|
$
|
2,126,997
|
|
|
|
|
|
|
|
SUPPLEMENTAL DISCLOSURE
OF CASH FLOW INFORMATION:
|
|
|
|
|
|
|
Income tax
paid
|
|
$
|
73,178
|
|
$
|
5,233
|
Interests
paid
|
|
$
|
28,768
|
|
$
|
6,474
|
The accompanying notes are an integral part of
these unaudited condensed consolidated financial statements.
F-6
EZGO TECHNOLOGIES LTD.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
(In U.S. dollars except for number of
shares)
1. ORGANIZATION AND
PRINCIPAL ACTIVITIES
EZGO Technologies Ltd. ("EZGO" or the "Company"), is a
holding company incorporated under the laws of the British Virgin Islands ("BVI")
on January 24, 2019. The Company commenced operations
through its variable interest entity ("VIE") and VIE's subsidiaries
in the People's Republic of China ("PRC"). The Company is
mainly engaged in sales of battery packs, battery cells, as
well as electric bicycles ("e-bicycle") and battery cell
trading in PRC. The consolidated financial
statements reflect the activities of EZGO and each of the
following entities:
Name
|
|
Date of
Incorporation / acquisition
|
|
Place of
incorporation
|
|
Percentage of
effective ownership
|
|
Principal
|
Wholly owned
subsidiaries
|
|
|
|
|
|
|
|
|
China EZGO Group Ltd.
(formerly known
as Hong Kong JKC Group Co., Ltd., "EZGO HK")
|
|
February 13,
2019
|
|
HK
|
|
100 %
|
|
Investment holding
company
|
Changzhou Langyi
Electronic Technologies
Co., Ltd.
|
|
August 6,
2021
|
|
PRC
|
|
100 %
|
|
WFOE
|
Changzhou EZGO
Enterprise Management
Co., Ltd. (formerly known as Changzhou
Jiekai Enterprise Management Co., Ltd.,
Wholly Foreign-owned Enterprise,
"WFOE" or "Changzhou EZGO")
|
|
June 12,
2019
|
|
PRC
|
|
100 %
|
|
WFOE, a holding
company
|
Jiangsu Langyi Import
and Export Trade Co.,
Ltd. ("Langyi Trading")
|
|
December 7,
2021
|
|
PRC
|
|
100 %
|
|
WFOE
|
Jiangsu EZGO Electronic
Technologies
Energy Supply Chain Technology Co., Ltd.
("Jiangsu Supply Chain")
|
|
December 10,
2021
|
|
PRC
|
|
100 %
|
|
WFOE
|
|
|
|
|
|
|
|
|
|
VIE and subsidiaries
of VIE
|
|
|
|
|
|
|
|
|
Jiangsu EZGO Electronic
Technologies Co.,
Ltd. (formerly known as Jiangsu Baozhe
Electric Technologies, Co., Ltd., "Jiangsu
EZGO")
|
|
July 30,
2019
|
|
PRC
|
|
VIE
|
|
Holding
company
|
Changzhou Hengmao Power
Battery
Technology Co., Ltd. ("Hengmao")
|
|
May 5, 2014
|
|
PRC
|
|
80.87 %
|
|
Sales of battery
packs,
battery cells, as well as
e-bicycles, battery cell
trading, and battery and
e-bicycle rental
services provider
|
Changzhou Yizhiying IoT
Technologies Co.,
Ltd. ("Yizhiying")
|
|
August 21,
2018
|
|
PRC
|
|
100 %
|
|
Development,
operation and
maintenance of
software related to e-
bicycle and battery
rental services
|
Jiangsu Cenbird
E-Motorcycle Technologies
Co., Ltd. ("Cenbird E-Motorcycle")
|
|
May 7, 2018
|
|
PRC
|
|
51 %
|
|
Development of
sales
channels and
international market for
sales of e-bicycles and
electric motorcycle ("e-
motorcycle")
|
Tianjin Dilang
Technologies Co., Ltd.
("Dilang")
|
|
July 2, 2019
|
|
PRC
|
|
80 %
|
|
Production and sales
of
e-bicycles
|
Tianjin Dilang Import
and Export Trading
Co., Ltd. ("Dilang Trading")
|
|
June 18,
2021
|
|
PRC
|
|
80 %
|
|
Import and Export
trade of e-bicycles
|
Tianjin Jiahao Bicycle
Co., Ltd. ("Tianjin
Jiahao")
|
|
June 28,
2021
|
|
PRC
|
|
100 %
|
|
Production and sales
of
e-bicycles
|
EZGO TECHNOLOGIES LTD.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
(In U.S. dollars except for number of
shares)
2. SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
(a) Basis of
presentation
The accompanying unaudited condensed consolidated financial
statements are prepared in accordance with accounting principles
generally accepted in the United States
of America ("U.S. GAAP"). The unaudited condensed
consolidated financial statements include the financial statements
of EZGO, its subsidiaries, its VIE and its VIE's subsidiaries for
which EZGO is the primary beneficiary. All inter-company
transactions and balances have been eliminated upon
consolidation.
(b) Accounts receivable,
net
Accounts receivable, net are stated at the original amount less
an allowance for doubtful receivables, if any, based on a review of
all outstanding amounts at period end. An allowance is also made
when there is objective evidence that the Company will not be able
to collect all amounts due according to the original terms of the
receivables. The Company analyzes the aging of the customer
accounts, coverage of credit insurance, customer concentrations,
customer credit-worthiness, historical and current economic trends
and changes in its customer payment patterns when evaluating the
adequacy of the allowance for doubtful accounts. For the six months
ended March 31, 2021 and 2022, the
Company recorded bad debt expense $10,827 and $113,140, respectively, against its accounts
receivable.
(c) Revenue
recognition
The Company adopted ASU 2014-09, Revenue from Contracts
with Customers (ASC Topic 606), starting October 1, 2017 using the modified retrospective
method for the revenue from sales of self-manufactured battery
cell, battery pack and e-bicycles and battery cell
trading. The Company applied ASC Topic 840, Leases, for the
revenue from rentals of lithium batteries and e-bicycles.
The core principle of ASC Topic 606 is that a company should
recognize revenue to depict the transfer of promised goods or
services to customers in an amount that reflects the consideration
to which the company expects to be entitled in exchange for those
goods or services. The following five steps are applied to achieve
that core principle:
Step 1: Identify the contract with the customers
Step 2: Identify the performance obligations in the contract
Step 3: Determine the transaction price
Step 4: Allocate the transaction price to the performance
obligations in the contract
Step 5: Recognize revenue when the company satisfies a
performance obligation
Revenue recognition policies are discussed as follows:
Revenue from sales of self-manufactured battery cell, battery
pack and e-bicycles
The Company sells products to different customers, primarily
including sale of self-manufactured battery cells (see Note 13
Discontinued Operation), self-assembled battery packs and sale of
e-bicycles. The Company presents the revenue generated from its
sales of products on a gross basis as the Company is a principal.
The revenue is recognized at a point in time when the Company
satisfies the performance obligation by transferring promised
product to a customer upon acceptance by customers.
EZGO TECHNOLOGIES LTD.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
(In U.S. dollars except for number of
shares)
2. SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES (continued)
(c) Revenue recognition
(continued)
Contract liabilities primarily consist of advances from
customers, which comprises unamortized lithium batteries. As of
September 30, 2021 and March 31, 2022, the Company recognized advances
from customers amounted to $94,899
and $1,060,177, respectively.
The revenues from sales of self-manufactured battery cells and
lithium batteries and e-bicycles services via sublease and its own
application named Yidianxing are revenues from the Company's
discontinued operation, and are represented separately in the
Consolidated Statements of Income for the six months ended
March 31, 2021 and 2022 (see Note 13
Discontinued Operation). The following table identifies the
disaggregation of the Company's revenue from continuing operations
for the six months ended March 31,
2021 and 2022, respectively:
|
For the six months
ended March 31,
|
|
2021
|
|
2022
|
Revenues from
continuing operations:
|
$
|
|
|
$
|
|
Sales of battery packs
and e-bicycles
|
|
8,670,927
|
|
|
5,636,353
|
Others
|
|
506,936
|
|
|
393,825
|
Net revenues
|
$
|
9,177,863
|
|
$
|
6,030,178
|
Timing of revenue recognition may differ from the timing of
invoicing to customers. Accounts receivable represent revenue
recognized for the amounts invoiced and/or prior to invoicing when
the Company has satisfied its performance obligation and has
unconditional right to the payment. The Company has no contract
assets as of September 30, 2021 and
March 31, 2022.
The Company applied a practical expedient to expense costs as
incurred for costs to obtain a contract with a customer when the
amortization period would have been one year or less. The Company
has no material incremental costs of obtaining contracts with
customers that the Company expects the benefit of those costs to be
longer than one year.
(d) Recent Accounting
Standards
Except for the ASUs ("Accounting Standards Updates") issued but
not yet adopted disclosed in "Note 2 (z) Recent Accounting
Standards" of the Company 2021 Form 20-F/A, there is no ASU issued
by the FASB that is expected to have a material impact on the
Company's consolidated results of operations or financial
position.
EZGO TECHNOLOGIES LTD.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
(In U.S. dollars except for number of
shares)
3. ACCOUNTS RECEIVABLES,
NET
As of September 30, 2021 and
March 31, 2022, accounts receivable
and allowance for doubtful accounts consisted of the following:
|
As of September
30,
|
|
As of March
31,
|
|
2021
|
|
2022
|
Accounts
receivable
|
$
|
6,881,763
|
|
$
|
6,199,151
|
Less: allowance for
doubtful accounts
|
|
(34,155)
|
|
|
(147,295)
|
Accounts receivable,
net
|
$
|
6,847,608
|
|
$
|
6,051,856
|
|
As of September
30,
|
|
As of March
31,
|
|
2021
|
|
2022
|
Balance at beginning of
the period
|
$
|
21,451
|
|
$
|
34,155
|
Current period
addition
|
|
11,438
|
|
|
113,387
|
Write-off
|
|
-
|
|
|
(644)
|
Foreign currency
translation adjustment
|
|
1,266
|
|
|
397
|
Balance at the end of
the period
|
$
|
34,155
|
|
$
|
147,295
|
For the six months ended March 31,
2021 and 2022, $9,744 and
$113,387 allowance for doubtful
accounts were recorded.
4. INVESTMENTS
As of September 30, 2021 and
March 31, 2022,
investments consisted of the following:
|
As of September
30,
|
|
As of March
31,
|
|
2021
|
|
2022
|
Wealth management
product (1)
|
$
|
1,611,015
|
|
$
|
-
|
Convertible debt
instrument (2)
|
|
775,988
|
|
|
788,731
|
Total short-term
investments
|
|
2,387,003
|
|
|
788,731
|
Long-term
investments
|
|
132,621
|
|
|
158,461
|
Total
investments
|
$
|
2,519,624
|
|
$
|
947,192
|
(1) Wealth management product is
deposits in a financial institution with variable interest rate and
not-guaranteed principal. The wealth management product was bought
on September 24, 2020, and carried at
fair value. It had duration of 1.5 years, during which the Company
could redeem the wealth management product at its discretion. On
March 31, 2022, the deposits are
redeemed. For the six months ended March 31,
2021 and 2022, there were no $nil and $112,918 interest income or loss recognized in
earnings. There were $54,629 and $nil
unrealized gain from the changes in fair values recognized in
accumulated other comprehensive loss for the six months ended
March 31, 2021 and 2022
(2) Convertible debt instrument was
issued by a private company and redeemable at the Company's option.
The convertible debt instrument is due on June 12, 2021, has annual interest rate of 6% and
carried at fair value. For the six months ended March 31, 2021 and 2022, there were no interest
income or loss recognized in earnings and no unrealized gain or
loss from the changes in fair values recognized in accumulated
other comprehensive income.
EZGO TECHNOLOGIES LTD.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
(In U.S. dollars except for number of
shares)
5. INVENTORIES, NET
As of September 30, 2021 and
March 31, 2022, inventories and
movement of inventories write-down consisted of the following:
|
As of September
30,
|
|
As of March
31,
|
|
2021
|
|
2022
|
Finished goods
(1)
|
$
|
635,851
|
|
$
|
3,243,683
|
Raw materials
(2)
|
|
352,539
|
|
|
390,398
|
Others
|
|
52,054
|
|
|
4,740
|
Write-down
|
|
(116,102)
|
|
|
(343,475)
|
Inventories
|
$
|
924,342
|
|
$
|
3,295,346
|
(1) Finished goods includes battery
packs and e-bicycles.
(2) Raw materials mainly include battery
cells purchased by the Company for battery packs assembling and
e-bicycles production.
|
As of September
30,
|
|
As of March
31,
|
|
2021
|
|
2022
|
Balance at beginning of
the period
|
$
|
-
|
|
$
|
116,102
|
Current period
addition
|
|
114,964
|
|
|
226,298
|
Write-off
|
|
-
|
|
|
-
|
Foreign currency
translation adjustment
|
|
1,138
|
|
|
1,075
|
Balance at the end of
the period
|
$
|
116,102
|
|
$
|
343,475
|
For the six months ended March 31,
2021 and 2022, nil and $226,298 write-down of inventories were
recorded.
6. ADVANCES TO SUPPLIERS,
NET
As of September 30, 2021 and
March 31, 2022, advances to
suppliers and allowance for doubtful accounts consisted of the
following:
|
As of September
30,
|
|
As of March
31,
|
|
2021
|
|
2022
|
Prepayment for purchase
of battery packs
|
$
|
2,953,616
|
|
$
|
4,908,417
|
Prepayment for purchase
of e-bicycles materials
|
|
4,094,894
|
|
|
4,928,702
|
Others
|
|
444,444
|
|
|
573,858
|
|
|
7,492,954
|
|
|
10,410,977
|
Less: allowance for
doubtful accounts
|
|
(88,416)
|
|
|
(89,868)
|
Advances to suppliers,
net
|
$
|
7,404,538
|
|
$
|
10,321,109
|
EZGO TECHNOLOGIES LTD.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
(In U.S. dollars except for number of
shares)
7. PREPAID EXPENSES AND
OTHER CURRENT ASSETS
As of September 30, 2021 and
March 31, 2022, prepaid expenses
and other current assets consisted of the following:
|
As of September
30,
|
|
As of March
31,
|
|
2021
|
|
2022
|
Prepaid construction
fee (1)
|
$
|
384,425
|
|
$
|
365,182
|
Deductible input
value-added tax
|
|
-
|
|
|
235,577
|
Prepaid rental
fee
|
|
74,288
|
|
|
33,026
|
Prepaid exhibition
fee
|
|
80,796
|
|
|
8,045
|
Others
|
|
70,093
|
|
|
101,042
|
Prepaid expenses and
other current assets
|
|
609,602
|
|
|
742,872
|
(1) The balance represented prepaid
construction fee for plant maintenance and renovation.
8. PROPERY, PLANTS AND
EQUIPMENT, NET
As of September 30, 2021 and
March 31, 2022, property, plants
and equipment, net consisted of the following:
|
As of September
30,
|
|
As of March
31,
|
|
2021
|
|
2022
|
Building
|
$
|
6,020,735
|
|
$
|
3,002,854
|
Equipment for rental
business
|
|
1,401,580
|
|
|
1,632,689
|
Production line for
e-bicycles
|
|
1,267,954
|
|
|
1,249,753
|
Leasehold
improvement
|
|
541,096
|
|
|
549,982
|
Furniture, fixtures and
office equipment
|
|
127,957
|
|
|
132,756
|
Vehicles
|
|
120,879
|
|
|
122,864
|
Construction in
progress
|
|
-
|
|
|
71,889
|
|
|
9,480,201
|
|
|
6,762,786
|
Less: Accumulated
depreciation
|
|
(733,815)
|
|
|
(1,194,741)
|
Property and equipment,
net
|
$
|
8,746,386
|
|
$
|
5,568,045
|
For the six months ended March 31,
2021 and March 31, 2022,
depreciation expense amounted to $185,479 and $334,811, respectively.
For the six months ended March 31,
2021 and March 31, 2022, the
Company disposed its property, plants and equipment, with proceeds
of $82,416 and $158,918 from disposal of property, plants and
equipment is recognized in the unaudited condensed consolidated
statements of operations, respectively.
EZGO TECHNOLOGIES LTD.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
(In U.S. dollars except for number of
shares)
9. LAND USE RIGHT
On March 12, 2021, Jiangsu EZGO
entered into an Asset Purchase Arrangement Agreement with
Benlin Huang, an individual, and
Tianjin Jiahao, a non-affiliated third party, pursuant to which
Jiangsu EZGO agreed to purchase certain land and plants of Tianjin
Jiahao for the Company's future production and business
development.
On April 2, 2021, Jiangsu EZGO
received a written Notice of Assignment, pursuant to which
Benlin Huang assigned and
transferred all of his rights, titles, and obligations under the
Asset Purchase Arrangement Agreement to Shanghai Mingli.
On April 19, 2021, Jiangsu EZGO
entered into a Shares Purchase Agreement with Shanghai Mingli and
Tianjin Jiahao pursuant to which Jiangsu EZGO obtained the right to
purchase 100% of the outstanding shares of Shanghai Mingli.
On June 28, 2021, Jiangsu EZGO has
completed the asset acquisition of Tianjin Jiahao with an aggregate
consideration of approximately US$10.16
million, and Tianjin Jiahao became Jiangsu EZGO's wholly
owned subsidiary. For the recent five years, Tianjin Jiahao did not
have employee or generate any revenue; and the assets of Tianjin
Jiahao only consisted of buildings and land-used right, which was
considered it inputs, thus, according to ASC 805-10-55-3A&4,
Tianjin Jiahao was not a business. The acquisition of Tianjin
Jianhao was accounted for as asset acquisition. The purchase price
was allocated to the buildings and land use right based on their
respective estimated fair values. The land use right is in
Tianjin city, Hebei province. In January 2022, the original value amounted to
$3.1 million of the buildings was
re-allocated to land use right according to a formal valuation
report issued by the independent third-party valuation specialist.
The remaining land use right has a term of 36.5 years and will
expire on December 4, 2057. For the
six months ended March 31, 2022, the
Company recognized amortization expense of $126,442.
The following table presents future amortization as of
March 31, 2022:
Years ending March
31,
|
|
Amount
|
2023
|
$
|
210,552
|
2024
|
|
210,552
|
2025
|
|
210,552
|
2026
|
|
210,552
|
2027 and
thereafter
|
|
6,720,754
|
|
$
|
7,562,960
|
10. ACCRUED EXPENSES AND OTHER PAYABLES
As of September 30, 2021 and
March 31, 2022, accrued expenses
and other payables consisted of the following:
|
As of September
30,
|
|
As of March
31,
|
|
2021
|
|
2022
|
Other taxes
payable(1)
|
$
|
6,559,454
|
|
$
|
6,924,676
|
Payroll
payable
|
|
292,126
|
|
|
400,344
|
Others
|
|
291,050
|
|
|
514,167
|
Accrued expenses and
other payables
|
$
|
7,142,630
|
|
$
|
7,839,187
|
(1) The balance mainly represented the
VAT payable of $5,875,913 and
$5,973,907 as of September 30, 2021 and March 31, 2022, respectively.
EZGO TECHNOLOGIES LTD.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
(In U.S. dollars except for number of
shares)
11. SHORT-TERM BORROWINGS
As of September 30, 2021 and
March 31, 2022, the borrowings
consisted of the following:
|
As of September
30,
|
|
As of March
31,
|
|
2021
|
|
2022
|
Short-term
borrowings
|
$
|
310,395
|
|
$
|
3,154,922
|
|
|
|
|
|
|
On August 11, 2020, Yizhiying
entered into a non-revolving loan facility of RMB2,000,000 ($294,568) with Bank of Jiangsu with annual interest rate of 4.35% and
a term of 12 months, which was guaranteed by Jianhui Ye, the Chief Executive Officer and a
significant shareholder of the Company.
On August 12, 2021, Yizhiying
entered into a new non-revolving loan facility of RMB2,000,000 ($310,395) with the same contract term of the
expired loan facility.
On January 25, 2022 Tianjin Jiahao
entered into a non-revolving loan facility of RMB18,000,000 ($2,839,430) with Tian Rural Commercial Bank with
annual interest rate of 3.7% and a term of 12 months.
For the six months ended March 31,
2021 and 2022, the Company recorded interest expenses of
$6,474 and $28,768, respectively.
EZGO TECHNOLOGIES LTD.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
(In U.S. dollars except for number of
shares)
12. RELATED PARTY TRANSACTIONS AND
BALANCES
The following is a list of related parties which the Company has
transactions with during the six months ended March 31, 2021 and 2022:
|
|
Name
|
|
Relationship
|
(a)
|
|
Henglong
Chen
|
|
A significant
shareholder of the Company
|
(b)
|
|
Huiyan Xie
|
|
General manager and
non-controlling shareholder of Dilang
|
(c)
|
|
Huajian Xu
|
|
A shareholder of the
Company
|
(d)
|
|
Shuang Wu
|
|
Chief Operating Officer
and a significant shareholder of the Company
|
(e)
|
|
Yan Fang
|
|
Non-controlling
shareholder of Cenbird E-Motorcycle
|
(f)
|
|
Jianhui Ye
|
|
Chief Executive Officer
and a significant shareholder of the Company
|
(g)
|
|
Changzhou Cenbird
Electric Bicycle Manufacturing Co., Ltd.
|
|
Yan Fang, a
non-controlling shareholder of Cenbird E-motorcycle, whose family
member serves as director of Changzhou Cenbird Electric Bicycle
Manufacturing Co., Ltd.
|
(h)
|
|
Jiangsu Xinzhongtian
Suye Co., Ltd.
|
|
Yuxing Liu, the spouse
of Yan Fang, serves as the executive of Jiangsu Xinzhongtian Suye
Co., Ltd.
|
(i)
|
|
Shenzhen Star Asset
Management Co., Ltd.
|
|
General Partner of
Xinyu Star Assets Management No.1 Investing Partnership and Xinyu
Star Assets Management No.2 Investing Partnership, which are two
significant shareholders of the Company
|
(j)
|
|
Beijing Weiqi
Technology Co., Ltd.
|
|
Wholly owned by Huiyan
Xie, the general manager and non-controlling shareholder of
Dilang
|
(k)
|
|
Shenzhen Star Cycling
Network Technology Co., Ltd.
|
|
Equity investments
without readily determinable fair value
|
(l)
|
|
Nanjing Mingfeng
Technology Co.,Ltd.
|
|
Equity investments
without readily determinable fair value
|
(m)
|
|
Shandong Xingneng'an
New Energy Technology Co., Ltd.
|
|
Equity investments
without readily determinable fair value
|
EZGO TECHNOLOGIES LTD.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
(In U.S. dollars except for number of
shares)
12. RELATED PARTY TRANSACTIONS AND BALANCES
(continued)
Amount due from related parties
As of September 30, 2021 and
March 31, 2022, amount due from
related parties, consisted of the following:
|
As of September
30,
|
|
As of March
31,
|
|
2021
|
|
2022
|
Shandong Xingneng'an
New Energy Technology Co., Ltd.(m) (4)
|
$
|
-
|
|
$
|
3,943,953
|
Changzhou Cenbird
Electric Bicycle Manufacturing Co., Ltd. (g)
(1)
|
|
1,771,585
|
|
|
2,153,427
|
Jiangsu Xinzhongtian
Suye Co., Ltd. (h) (1)
|
|
678,600
|
|
|
487,738
|
Shenzhen Star Cycling
Network Technology Co., Ltd. (k) (2)
|
|
310,395
|
|
|
473,238
|
Shuang Wu (d)
(3)
|
|
163,448
|
|
|
171,116
|
Huajian Xu (c)
(3)
|
|
265,357
|
|
|
107,267
|
Beijing Weiqi
Technology Co., Ltd. (j) (4)
|
|
32,830
|
|
|
29,978
|
Jianhui Ye (f)
(3)
|
|
2,010
|
|
|
7,427
|
Yan Fang (e)
(3)
|
|
-
|
|
|
6,496
|
Nanjing Mingfeng
Technology Co., Ltd. (l) (2)
|
|
228,774
|
|
|
-
|
Huiyan Xie (b)
(3)
|
|
71,636
|
|
|
-
|
Amount due from related
parties-current
|
$
|
3,524,635
|
|
$
|
7,380,639
|
|
|
|
|
|
|
Changzhou Cenbird
Electric Bicycle Manufacturing Co., Ltd.(5)
|
|
310,395
|
|
|
315,492
|
Amount due from related
parties-non-current
|
$
|
310,395
|
|
$
|
315,492
|
(1) The balance mainly represented the
prepayments for purchasing e-bicycle gears and e-bicycles.
(2) The balance mainly represented loans
with annual interest rate of 5% to associates.
(3) The balances mainly represented the
advances made to the managements for the Company's daily
operational purposes.
(4) The balance represented the
receivable generated from the sales of e-bicycles.
(5) The balance mainly represented the
deposit for conducting original design manufacture ("ODM") of
e-bicycles and the deposit will be returned in one year
EZGO TECHNOLOGIES LTD.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
(In U.S. dollars except for number of
shares)
12. RELATED PARTY TRANSACTIONS AND BALANCES
(continued)
Amount due to related parties
As of September 30, 2021 and
March 31, 2022, amount due to related
parties, consisted of the following:
|
As of September
30,
|
|
As of March
31,
|
|
2021
|
|
2022
|
Huiyan Xie (b)
(1)
|
$
|
-
|
|
$
|
199,590
|
Yan Fang (e)
(1)
|
|
70,840
|
|
|
73,112
|
Nanjing Mingfeng
Technology Co., Ltd. (l) (2)
|
|
-
|
|
|
1,038
|
Shenzhen Star Asset
Management Co., Ltd. (i) (2)
|
|
1,009
|
|
|
1,025
|
Amount due to related
parties
|
$
|
71,849
|
|
$
|
274,766
|
(1) The balances mainly represented the
expenses paid on behalf of the Company for IPO or daily
operation.
(2) The balances represented the payable
for purchasing e-bicycles.
Related party transactions
For the six months ended March 31,
2021 and 2022, the Company had the following material
related party transactions:
|
|
|
|
For the six months
ended March 31,
|
Related
parties
|
|
Nature
|
|
2021
|
|
2022
|
Shandong Xingneng'an
New Energy Technology Co., Ltd (m)
|
|
Purchase
of e-bicycles from a related
party
|
$
|
-
|
$
|
(2,355,010)
|
Shandong Xingneng'an
New Energy Technology Co., Ltd (m)
|
|
Loan to a related
party
|
|
-
|
|
1,570,007
|
Shandong Xingneng'an
New Energy Technology Co., Ltd (m)
|
|
Sales of battery pack
to a related party
|
|
-
|
|
298
|
Changzhou Cenbird
Electric Bicycle Manufacturing Co., Ltd. (g)
|
|
Purchase of e-bicycles
from a related party
|
|
(1,533,568)
|
|
(1,597,467)
|
Jiangsu Xinzhongtian
Suye Co., Ltd. (h)
|
|
Purchase of e-bicycles
from a related party
|
|
(379,866)
|
|
(287,501)
|
Shenzhen Star Cycling
Network Technology Co., Ltd.(k)
|
|
Loan to a related
party
|
|
-
|
|
157,001
|
Nanjing Mingfeng
Technology Co.,Ltd.(l)
|
|
Loan to a related
party
|
|
-
|
|
314,001
|
Nanjing Mingfeng
Technology Co.,Ltd.(l)
|
|
Repayment of a loan to
a related party
|
|
-
|
|
(549,502)
|
Henglong Chen
(a)
|
|
Collection of loan from
a shareholder
|
|
(443,997)
|
|
(34,540)
|
Beijing Weiqi
Technology Co., Ltd (j)
|
|
Sales of e-bicycles to
a related party
|
|
7,074
|
|
-
|
EZGO TECHNOLOGIES LTD.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
(In U.S. dollars except for number of
shares)
13. DISCONTINUED OPERATION
In November 2018, the Company
entered into an agreement with a third-party company to dispose its
battery cell production line. The production line was disposed in
December 2018. After the disposal,
the Company is no longer engaged in the manufacturing of battery
cells. The disposal of the production line was treated as a
discontinued operation for all fiscal years presented.
Due to the impact of COVID-19, the revenue of rental business
decreased after December 2019, which
led to the termination of the cooperation with its sublease agents
from January 2020 to July 2020. Therefore, management decided to
dispose majority of its rental assets, mainly batteries and
E-bicycle, before September 30, 2021.
The disposal of the Company's rental business was also treated as a
discontinued operation for all fiscal years presented.
The assets and liabilities of the discontinued operations, which
are included in "Current assets of discontinued operation" and
"Current liabilities of discontinued operation", on the
Consolidated Balance Sheets, consist of the following:
|
As of September
30,
|
|
As of March
31,
|
|
2021
|
|
2022
|
Assets of
discontinued operation
|
|
|
|
|
|
Accounts
receivable
|
$
|
82,790
|
|
$
|
-
|
Advance to
suppliers
|
|
1,135
|
|
|
1,154
|
Other receivable and
prepaid expense
|
|
8,072
|
|
|
-
|
Total current
assets
|
|
91,997
|
|
|
1,154
|
Property, plant and
equipment, net
|
|
46,381
|
|
|
27,461
|
Total non-current
assets
|
|
46,381
|
|
|
27,461
|
Total
assets
|
$
|
138,378
|
|
$
|
28,615
|
|
|
|
|
|
|
Liabilities of
discontinued operation
|
|
|
|
|
|
Accounts
payable
|
|
293,073
|
|
|
290,804
|
Advance from
customers
|
|
35,971
|
|
|
36,561
|
Other
payable
|
|
664
|
|
|
675
|
Income tax
payable
|
|
479,513
|
|
|
487,388
|
Total current
liabilities
|
|
809,221
|
|
|
815,428
|
Total
liabilities
|
$
|
809,221
|
|
$
|
815,428
|
The following are revenues and income (loss) from
discontinued operation:
|
|
For the six months
ended March 31,
|
|
|
2021
|
|
|
2022
|
Net revenues
|
$
|
426,893
|
|
$
|
261
|
Cost of
revenues
|
|
(250,686)
|
|
|
(1,847)
|
Loss from discontinued
operation before income tax
|
|
6,703
|
|
|
(105,797)
|
Income tax benefit
(expense)
|
|
(11,861)
|
|
|
-
|
Loss from discontinued
operation, net of income tax
|
$
|
(5,158)
|
|
$
|
(105,797)
|
EZGO TECHNOLOGIES LTD.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
(In U.S. dollars except for number of
shares)
14. INCOME TAXES
BVI
The Company is incorporated in the BVI. Under the current
laws of the BVI, the Company is not subject to income or capital
gains taxes. In addition, dividend payments are
not subject to withholdings tax in the BVI.
Hong Kong
On March 21, 2018, the Hong Kong
Legislative Council passed The Inland Revenue (Amendment) (No. 7)
Bill 2017 (the "Bill") which introduces the two-tiered profits
tax rates regime. The Bill was signed into law on March 28, 2018 and was announced on the following
day. Under the two-tiered profits tax rates regime, the first
2 million Hong Kong Dollar ("HKD") of
profits of the qualifying group entity will be taxed at 8.25%,
and profits above HKD 2 million will be taxed at 16.5%.
The Company's Hong Kong
subsidiaries did not have assessable profits that were derived
in Hong Kong for the six
months ended March 31, 2021 and 2022.
Therefore, no Hong Kong profit tax
has been provided for fiscal the years ended March
31, 2021 and 2022.
PRC
The Company's PRC subsidiaries, VIE and VIE's subsidiaries
are subject to the PRC Enterprise Income Tax Law ("EIT Law") and
are taxed at the statutory income tax rate of 25%, unless
otherwise specified. The components of the income tax
expense (benefit) from continuing operations are:
The components of the income tax expense (benefit) from
continuing operations are:
|
|
For the six months
ended March 31,
|
|
|
2021
|
|
|
2022
|
Current
|
$
|
30,749
|
|
$
|
-
|
Deferred
|
|
(13,260)
|
|
|
519,311
|
Total income tax
expense
|
$
|
17,489
|
|
$
|
519,311
|
The reconciliations of the statutory income tax rate and
the Company's effective income tax rate are as follows:
|
|
For the six months
ended March 31,
|
|
|
2021
|
|
|
2022
|
Net loss before
provision for income taxes
|
$
|
(266,347)
|
|
$
|
(2,047,359)
|
PRC statutory tax
rate
|
|
25 %
|
|
|
25 %
|
Income tax at statutory
tax rate
|
$
|
(66,587)
|
|
$
|
(511,840)
|
|
|
|
|
|
|
Expenses not deductible
for tax purpose
|
|
1,920
|
|
|
7,245
|
Effect of income tax
rate differences in jurisdictions other than the PRC
|
|
79,816
|
|
|
131,137
|
Effect on valuation
allowance
|
|
2,340
|
|
|
892,769
|
Income tax
expense
|
$
|
17,489
|
|
$
|
519,311
|
Effective tax
rates
|
|
-7 %
|
|
|
-25 %
|
EZGO TECHNOLOGIES LTD.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
(In U.S. dollars except for number of
shares)
14. INCOME TAXES (continue)
The current PRC EIT Law imposes a 10% withholding income
tax for dividends distributed by foreign invested enterprises to
their immediate holding companies outside the PRC. A
lower withholding tax rate will be applied if there is a tax treaty
arrangement between the PRC and the jurisdiction of
the foreign holding company. Distributions to holding
companies in Hong Kong that
satisfy certain requirements specified by the PRC tax
authorities, for example, will be subject to a 5%
withholding tax rate.
As of September 30, 2021 and
March 31, 2022, the Company had
not recorded any withholding tax on the retained earnings of its
foreign invested enterprises in the PRC, since the
Company intends to reinvest its earnings to further expand its
business in mainland China, and
its foreign invested enterprises do not intend to declare
dividends to their immediate foreign holding companies.
For the six months ended March 31,
2021 and 2022, the effect of income tax rate differences in
jurisdictions other than the PRC mainly resulted from the
loss in EZGO, which is incorporate in BVI and is not
subject to income or capital gains taxes. The effective tax rates
are -7% and -25% for the six months ended March 31, 2021 and 2022 respectively. The Company
accrued valuation allowance for deferred tax assets of $892,769 for the six months end
March 31, 2022, with consideration
that it is unlikely to create enough future taxable income to fully
utilize its deferred tax assets.
Accounting for uncertainty tax position
The Company did not identify significant unrecognized tax
benefits for the six months ended March 31,
2021 and 2022. The Company did not incur any interest
and penalties related to potential underpaid income tax
expenses. In general, the PRC tax authority has up to five years to
conduct examinations of the Company's tax filings.
Accordingly, the tax years from 2016 to 2021 of the Company's PRC
subsidiaries and VIE and subsidiaries of the VIE remain open
to examination by the taxing jurisdictions. The Company does not
expect that its assessment regarding
unrecognized tax positions will materially change over
the next 12 months.
EZGO TECHNOLOGIES LTD.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
(In U.S. dollars except for number of
shares)
15. EQUITY
(a) Ordinary shares
The Company was established under the laws of the BVI on
January 24, 2019. The authorized
number of Ordinary Shares was 50,000 with par value of $1 per share. On January
24, 2019, the Company issued 50,000 shares to the
shareholders at par $1 per share.
On September 8, 2020, the Company
effected a one thousand-for-one subdivision of shares to
shareholders, which increased the total number of authorized and
issued ordinary shares of 50,000 to 50,000,000 and decreased the
par value of ordinary shares from $1
to $0.001. The Company also
registered an additional authorized number of ordinary shares of
50,000,000 of par value of $0.001 per
share and preferred shares of 10,000 of no par value. Then the
shareholders surrendered a pro-rata number of ordinary shares of
42,200,000 to the Company for no consideration and thereafter
cancelled. Following the surrender, the issued and outstanding
ordinary shares were 7,800,000 of par value of $0.001 per share.
On January 28, 2021, the Company
closed its initial public offering ("IPO"). 3,038,500 ordinary
shares, par value $0.001 per share,
at an offering price of $4 per share
for a total of $12,154,000 in gross
proceeds. The Company raised total net proceeds of $10,845,638 after deducting underwriting
discounts, commotions, and offering expenses.
On June 1, 2021, the Company,
closed its registered direct public offering of 2,564,102 units of
its securities (each, a "Unit"), with each Unit consisting of (i)
one ordinary share of the Company, par value $0.001 per share, and (ii) one warrant to
purchase 0.7 ordinary share, at an offering price of $4.68 per Unit for a total $12,000,000 in gross proceeds. The Company raised
total net proceeds of $10,881,576
after deducting underwriting discounts, commotions, and offering
expenses.
(b) Subscription receivable
As of September 30, 2021 and
March 31, 2022, subscription
receivable on the Consolidated Balance Sheets represented the
unrecovered consideration of the 7,800,000 ordinary shares issued
by the Company.
(c) Statutory reserve and restricted net
assets
The Company's PRC subsidiaries, VIE and VIE's subsidiaries are
required to reserve 10% of their net profit after income tax, as
determined in accordance with the PRC accounting rules and
regulations. Appropriation to the statutory reserve by the Company
is based on profit arrived at under PRC accounting standards for
business enterprises for each year. The profit arrived at must be
set off against any accumulated losses sustained by the Company in
prior years, before allocation is made to the statutory reserve.
Appropriation to the statutory reserve must be made before
distribution of dividends to shareholders. The appropriation is
required until the statutory reserve reaches 50% of the registered
capital. This statutory reserve is not distributable in the form of
cash dividends. As of September 30,
2021 and March 31, 2022,
statutory reserve provided were $233,413 and $237,849, respectively.
EZGO TECHNOLOGIES LTD.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
(In U.S. dollars except for number of
shares)
15. EQUITY (continued)
(c) Statutory reserve and restricted net
assets (continued)
Relevant PRC statutory laws and regulations permit the payment
of dividends by the Company's PRC subsidiaries and VIE and VIE's
subsidiaries only out of their retained earnings, if any, as
determined in accordance with PRC accounting standards and
regulations. Furthermore, registered share capital and capital
reserve accounts are also restricted from distribution. As a result
of these PRC laws and regulations, the Company's PRC subsidiaries
and VIE and VIE's subsidiaries are restricted in their ability to
transfer a portion of their net assets to the Company either in the
form of dividends, loans or advances. The Company's restricted net
assets, comprising of the registered paid in capital and statutory
reserve of Company's PRC subsidiaries and VIE and VIE's
subsidiaries, were $28,064,866 and $28,382,302 as of September 30, 2021 and March 31, 2022, respectively.
(d) Receivables from a shareholder
Receivables from a shareholder as of September 30, 2021 and March 31, 2022 included the loans to Mr. Henglong
Chen, a significant shareholder and former Chairman of Board of the
Company, amounted to $3,152,179, and
$3,169,238, respectively.
(e) Warrant
In January 2021, the warrant
shares were granted to an underwriter to purchase 303,850 ordinary
shares at an exercise price of $4.40
per share. The warrant shares can be purchased in cash or via the
cashless exercise option. As the share price on the exercise date
was higher than the exercise price of $4.40, the Company issued 224,289 ordinary shares
to warrant holders for free.
In June 2021, warrant shares were
granted to investors in the Company's public offering to purchase
1,794,871 ordinary shares at an exercise price of $4.68 per share. Warrants shares were also
granted to FT Global Capital, Inc. to purchase 217,948 ordinary
shares at an exercise price of $5.85
per share. Both the warrant shares granted to both investors and FT
Global Capital, Inc. can be purchased in cash or via cashless
exercise option, and are exercisable before June 1, 2023.
As of March 31, 2022, the warrant
shares granted to investors and FT Global Capital, Inc. have not
been exercised.
(f) Non-controlling interests
As of March 31, 2022, the
Company's non-controlling interests represented 19.13% equity
interest of Hengmao, 20% equity interest of Dilang, which was
established on July 2, 2019, and 49%
equity interest of Cenbird E- Motorcycle, which was acquired on
September 10, 2019.
EZGO TECHNOLOGIES LTD.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
(In U.S. dollars except for number of
shares)
16. COMMITMENTS AND CONTINGENCIES
Legal Proceedings
From time to time, the Company may be subject to legal
proceedings, investigations and claims incidental to the conduct of
our business. The Company currently have two
contract disputes with our suppliers, Jiangsu Anruida New
Material Company Limited ("Anruida") and Zhuhai Titans New
Power Electric Co., Ltd. ("Titans").
On October 21, 2019,
Anruida commenced an action against Hengmao Power Battery in
Changzhou Wujin District Intermediate People's Court
alleging that Hengmao Power Battery defaulted on the
contract payment of RMB958,805.40
(approximately $148,804) and seeking
for, among others, the payment of the contractual payment and
the interest on the contractual payment. The appellate court has
rendered its judgment on January 28, 2021, pursuant to
which Hengmao Power Battery shall repay RMB958,805.40 and accrued interests. The Company
properly accrued the repayment amount and interest as of
March 31, 2022.
On January 6, 2020, Titans
commenced an action against Hengmao Power Battery in Changzhou
Wujin District Intermediate People's Court alleging that
Hengmao Power Battery defaulted on the payment of RMB1,072,560 (approximately $166,459) and seeking for, among others, the
payment of the contractual payment. However, the Company
plan to defend the case rigorously. The appellate court has
rendered its judgment on January 27,
2021, pursuant to which Hengmao Power Battery shall repay
RMB1,072,560 (approximately
$166,459), accrued interests and
attorney's fees. The Company properly accrued the repayment
amount and interest as of March 31,
2022.
Other than disclosed above, the Company are not a party to,
nor are we aware of, any legal proceedings, investigations or
claims which, in the opinion of our management,
are likely to have a material adverse effect on our business,
financial condition or results of operations.
Operating Leases
The Company leases its offices under non-cancelable operating
lease agreements. Rent and related utilities expense under all
operating leases, included in operating expenses in the unaudited
condensed consolidated statements of operations, amounted to
$102,435 and $114,816 for the six months ended March 31, 2021 and 2022, respectively.
The following table presents future minimum rental payments
required under operating leases as of March
31, 2022:
Years ended March
31, 2022
|
|
|
Amount
|
2023
|
|
$
|
148,597
|
2024
|
|
|
99,829
|
2025
|
|
|
64,290
|
2026
|
|
|
21,430
|
2027 and
thereafter
|
|
|
-
|
|
|
$
|
334,145
|
EZGO TECHNOLOGIES LTD.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
(In U.S. dollars except for number of
shares)
17. SEGMENT REPORTING
The Company has determined that it operates in two operating
segments: (1) Battery cells and packs segment, and (2) E-bicycle
sales segment. The battery cells and packs segment engages in
selling battery packs and trading battery cells. The e-bicycle
sales segment sells e-bicycles on various ecommerce platforms to
individual customers.
The Company's CODM, chief executive officer, measures the
performance of each segment based on metrics of revenue and profit
before taxes from operations and uses these results to evaluate the
performance of, and to allocate resources to each of the segments.
As most of the Company's long-lived assets are located in the PRC
and most of the Company's revenues are derived from the PRC, no
geographical information is presented. The Company does not
allocate assets to its segments as the CODM does not evaluate the
performance of segments using asset information.
The following tables present the summary of each reportable
segment's revenue and income, which is considered as a segment
operating performance measure, for the six months ended
March 31, 2021 and 2022:
|
|
For the six months
ended March 31, 2021
|
|
|
Battery
cells and
packs
segment
|
|
E-bicycle
sales
segment
|
|
Subtotal
from
operating
segments
|
|
Other
|
|
Consolidated
|
Revenues from external
customers
|
$
|
1,027,888
|
$
|
7,643,039
|
$
|
8,670,927
|
$
|
506,936
|
$
|
9,177,863
|
Depreciation and
amortization
|
|
885
|
|
26,976
|
|
27,861
|
|
162,661
|
|
190,522
|
Segment income (loss)
before tax
|
|
58,539
|
|
220,587
|
|
279,126
|
|
(545,473)
|
|
(266,347)
|
Segment gross profit
margin
|
|
0.9 %
|
|
9.9 %
|
|
8.9 %
|
|
-2.0 %
|
|
8.3 %
|
|
|
For the six months
ended March 31, 2022
|
|
|
Battery
cells and
packs
segment
|
|
E-bicycle
sales
segment
|
|
Subtotal
from
operating
segments
|
|
Other
|
|
Consolidated
|
Revenues from external
customers
|
$
|
1,581,023
|
$
|
4,055,330
|
$
|
5,636,353
|
$
|
393,825
|
$
|
6,030,178
|
Depreciation and
amortization
|
|
11,586
|
|
314,218
|
|
325,804
|
|
133,930
|
|
459,734
|
Segment income (loss)
before tax
|
|
(467,914)
|
|
(1,110,789)
|
|
(1,578,703)
|
|
(468,657)
|
|
(2,047,360)
|
Segment gross profit
margin
|
|
4.5 %
|
|
1.6 %
|
|
2.4 %
|
|
36.9 %
|
|
4.7 %
|
EZGO TECHNOLOGIES LTD.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
(In U.S. dollars except for number of
shares)
16. SEGMENT REPORTING
(continued)
The following table presents the reconciliation from reportable
segment income to the consolidated income from continuing
operations before income taxes for the six months ended
March 31, 2021 and 2022:
|
|
For the six months
ended in March 31,
|
|
|
2021
|
|
2022
|
Net revenues
|
|
|
|
|
Total revenue from
reportable segments
|
$
|
8,670,927
|
$
|
5,636,353
|
Other
revenues
|
|
506,936
|
|
393,825
|
Consolidated net
revenues
|
$
|
9,177,863
|
$
|
6,030,178
|
|
|
|
|
|
Income or
loss
|
|
|
|
|
Total operating income
(loss) for reportable segments
|
$
|
197,673
|
$
|
(1,928,998)
|
Other income for
reportable segments
|
|
81,453
|
|
350,295
|
Total income for
reportable segments
|
|
279,126
|
|
(1,578,703)
|
|
|
|
|
|
Unallocated
amounts:
|
|
|
|
|
Other corporate
(expense) gain
|
|
(545,473)
|
|
(468,657)
|
Consolidated income
(loss) from continuing operations
before income taxes
|
$
|
(266,347)
|
$
|
(2,047,360)
|
18. CONCENTRATIONS
Concentrations of credit risk
As of September 30, 2021 and
March 31, 2022, cash, cash
equivalents and restricted cash balances in the PRC are
$5,889,885 and $5,889,885, respectively, which were primarily
deposited in financial institutions located in Mainland China, and
each bank account is insured by the government authority with the
maximum limit of RMB500,000
(equivalent to $70,692). To limit
exposure to credit risk relating to deposits, the Company primarily
place cash and cash equivalent deposits with large financial
institutions in China which
management believes are of high credit quality and management also
continually monitors the financial institutions' credit
worthiness.
Concentrations of customers
The following table sets forth information as to each customer
that accounted for 10% or more of total accounts receivable as of
September 30, 2021 and March 31, 2022.
|
|
As of September 30,
2021
|
|
As of March 31,
2022
|
|
|
Amount
|
|
% of
Total
|
|
Amount
|
|
% of
Total
|
A
|
$
|
863,626
|
|
12 %
|
$
|
1,469,856
|
|
24 %
|
B
|
|
1,083,605
|
|
16 %
|
|
1,250,679
|
|
20 %
|
C
|
|
1,102,586
|
|
16 %
|
|
1,120,692
|
|
18 %
|
D
|
|
*
|
|
*
|
|
822,022
|
|
13 %
|
E
|
|
1,289,276
|
|
19 %
|
|
*
|
|
*
|
F
|
|
1,253,742
|
|
18 %
|
|
*
|
|
*
|
Total
|
$
|
5,592,835
|
|
81 %
|
$
|
4,663,249
|
|
75 %
|
EZGO TECHNOLOGIES LTD.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
(In U.S. dollars except for number of
shares)
18. CONCENTRATIONS (continued)
The following table sets forth information as to each customer
that accounted for 10% or more of total revenue for the six months
ended March 31, 2021, and 2022.
|
|
For the six months
ended March 31, 2021
|
|
For the six months
ended March 31, 2022
|
|
|
Amount
|
|
% of
Total
|
|
Amount
|
|
% of
Total
|
D
|
$
|
*
|
|
*
|
$
|
1,595,799
|
|
26 %
|
A
|
|
*
|
|
*
|
|
1,289,791
|
|
21 %
|
G
|
|
1,942,651
|
|
20 %
|
|
*
|
|
*
|
H
|
|
1,442,035
|
|
15 %
|
|
*
|
|
*
|
Total
|
$
|
3,384,686
|
|
35 %
|
$
|
2,885,590
|
|
48 %
|
|
|
|
|
|
|
|
|
|
* Represented the percentage below 10%.
The following table sets forth information as to each supplier
that accounted for 10% or more of total purchase for the six months
ended March 31, 2021, and 2022.
|
|
For the six months
ended March 31, 2021
|
|
For the six months
ended March 31, 2022
|
|
|
Amount
|
|
% of
Total
|
|
Amount
|
|
% of
Total
|
A
|
$
|
*
|
|
*
|
$
|
2,377,932
|
|
11 %
|
B
|
|
1,092,825
|
|
11 %
|
|
2,167,480
|
|
10 %
|
C
|
|
2,948,536
|
|
31 %
|
|
*
|
|
*
|
D
|
|
1,570,698
|
|
16 %
|
|
*
|
|
*
|
Total
|
$
|
5,612,059
|
|
58 %
|
$
|
4,545,412
|
|
22 %
|
|
|
|
|
|
|
|
|
|
* Represented the percentage below 10%.
EZGO TECHNOLOGIES LTD.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
(In U.S. dollars except for number of
shares)
19. SUBSEQUENT EVENTS
On July 21, 2022, EZGO entered
into a securities purchase agreement (the "SPA") with certain
"non-U.S. Persons" (the "Purchasers") as defined in Regulation
S of the Securities Act of 1933, as amended (the
"Securities Act"), pursuant to which EZGO sold 10,000,000 ordinary
shares, (the "Shares") par value US $0.001 per share (the "Ordinary Shares"), at a
per share purchase price of $0.80
(the "Offering"). The gross proceeds to EZGO from the Offering were
US$8.0 million. Upon closing of this
Offering, there were 23,626,891 Ordinary Shares issued and
outstanding.
The Company has performed an evaluation of subsequent events
through August 17, 2022, which was the date of the issuance of
the consolidated financial statements, and determined that no
events that would have required adjustment or disclosure in the
consolidated financial statements other than those discussed in
above.
View original
content:https://www.prnewswire.com/news-releases/ezgo-announces-financial-results-for-the-six-months-ended-march-31-2022-301608357.html
SOURCE EZGO Technologies Ltd.